Thursday, February 9, 2012

Grow Your Service and Parts Business in 2012

What was the biggest problem in 2010? Not enough people to take care of the Customers! This is the single biggest problem I see today in Dealerships. In 2010, I've visited Dealerships from Kentucky to Virginia to Texas to Minnesota to Georgia to Wisconsin to Florida. All but one have the same problem in common - not enough people to "cuddle" the Customers. Since 2008, almost every business cut its staff. It made sense. The future was uncertain; businesses needed to remain profitable and the logical place to start was the single largest expense every non-manufacturing business has - Personnel Expense. Several positives came from this. Dealerships were able to get rid of outrageous guarantees, "dead weight" and they were forced to improve and streamline processes. But if Dealers want to thrive in the coming years now that the economy is well-past "rock bottom" (March, 2009), they have to be prepared to grow their Service & Parts business by being able to handle the business professionally and properly.

The problem seems to be that Dealers are now "addicted" to very high Net Profits and Net Profit to Gross Profit ratios. What I am talking about is adding straight commissioned Service Advisors and Technicians to the Staff, not overhead "fat". This will increase both Gross Profits and Net Profits. New Vehicle Sales will not "rebound" to previous levels for years; it's called "the New Normal". The "gold" is in Used, Service and Parts. Prepare for "the New-Normal" that we have been in and will be in for the next few years by staffing your Departments with the right number of Employees to take care of your current and prospective Customers. In the Service Department, to have enough time to take care of the Customers, your Service Advisors should NOT be handling more than 15 Customers a day on average (12 if you are a high-line Dealer). And if your Service Advisors have taken on the cashiering duties or warranty coding, the number of Customers they should handle should be less. Here's a simple exercise; for the month take the number of Customer Pay and Warranty Repair Orders and add them together. Add in the Internal Repair Orders IF your Service Advisors also write those. Then divide the R.O. totals by the number of Service Advisors. If you answer exceeds 325, you need more Advisors.

If you're thinking, "Our Advisors are currently able to handle our Customers, we don't need to add anyone else." think about this: As of 2009, the average Customer pay vehicle in most Service Departments had well over 70,000 miles on it; do you think it only needs an oil change? Couple that with the fact that your Service Advisors are seeing Customers maybe twice a year due to expanded maintenance requirements and improved product quality. That doesn't give them/you many chances to build a relationship or take good care of the Customer's vehicle. To do both, your Advisors need TIME! Your Service Advisors may be forced into "short-cutting" crucial steps when they handle too many Customers. Advisors will do what it takes to keep up with the day's work, but are they doing what it takes to increase your business and theirs when they don't have the time? Advisors write up the Customer, get the spending approval for the Customer's request and close out the ticket. Hopefully they personally deliver the vehicle back to the Customer through the Active Delivery process to RETAIN that Customer. But to grow your Service Business and to increase your Sales per Repair Order, they need to do more.

Below are 10 processes that could be falling by the wayside on a daily basis if you are shorthanded:
1. Taking a GOOD reservation prewriteup, including requesting mileage.

2. Reviewing the Customer's vehicle's history, looking for needed or previously missed maintenance and postponed repairs for presentation to the Customer.

3. Doing a GOOD Walk-Around with the Customer when the Customer arrives.

4. Presenting the appropriate Maintenance Menu after the Walk-Around.

5. Properly introducing the permission based Multipoint Inspection.

6. The Technicians doing a quality Multipoint Inspection, with digital photos.

7. The Advisors then contacting the Customer and asking for the sale on items found during the Technicians' Multipoint Inspection (if you think this is already happening, ask the Techs, not the Advisors).

8. Providing BEST, Better, good options to close more Sales.

9. Soliciting a good follow-up date on the unsold work, and recording same in an electronic reminder system such as Outlook, Google Calendar, etc.

10. Doing face-to face Active Deliveries where the Advisors set the next Service Appointment and request any other vehicles at home you could maintain for the Customer.

When any one of those processes is skipped, you are wasting your "Service Ups." When you have enough trained staff to follow the processes that are designed to take care of your Customers, everyone wins. My Service Drive Process works best when all of the steps are followed, and to do that, you need enough people. Your Customers are depending on your Dealership to take care of their vehicles. To do that your Advisors must look at the vehicle's mileage and vehicle's history; then recommend what it takes for a Customer's vehicle to be safe and worry free. By inviting the Customer to your Dealership, you have taken on the responsibility of taking care of the Customer's vehicle. That means selling recommended repairs and needed maintenance, not just accepting what the Customer came in for.

Not only do you need enough Service Advisors, you need enough Technicians with time to do the work the vehicles need. Your Technicians become more efficient when they are not bounced from one vehicle to another. Few things are more frustrating to a Technician than starting a job, then being told, "Wait a minute, could you to take a quick look at this vehicle," or "Could you knock out this waiter oil change before you finish that?" Running around in chaos to take care of Customers' vehicles willy-nilly because we have too few Technicians is inefficient and wastes your Tech's time. Your Technicians will NOT do a quality Multipoint Inspection until they know the Advisors are going to sell the work and they know they will get a chance to do the work on a vehicle that is already in their stall. Otherwise, it's all checkmarks or a rubber-stamped approach. If you say, you can't find any good people; try, "the national electronic bulletin board." Every Dealership I have been in has had amazing results when they post an ad on Craigslist. Just last week, in Macclenny, Florida (where you ask? - right), the Service Department needed to add more Technicians. Within 24 hours of posting the ad, the Service Manager was interviewing and hired a GM Master Tech, with another GM and Ford Master Tech coming in the next day. There is no good excuse for not having the right amount of staff. The only way your Staff can handle your Customers properly is to have enough folks to "cuddle" your Customers. This then optimizes your Customer's visit, your facility, and dollars spent on training and advertising. Take care of your Customers and they'll take care of you by coming back and spending money vs. defecting to the 100s of options they all have that are closer to home or closer to work. For more ideas like this or information on Management Training & Development for Dealership Operations please contact Lloyd Schiller at lloydschiller.426

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